Royal Bank of Canada Cuts Holdings in Graham Corporation $GHM

Key Points

• Royal Bank of Canada cut its Graham stake by 12.8% in the first quarter, selling 31,506 shares and retaining 214,119 shares worth about $16.9 million. Institutional investors collectively own 69.46% of GHM.
• Graham reported a strong quarter, with EPS of $0.49 versus the $0.27 consensus and revenue up 28.6% year over year to $71.34 million. Orders reached $95.9 million, backlog hit a record $557.2 million, and the company secured more than $43 million in defense contracts.
• Despite the earnings beat, management maintained fiscal 2027 revenue guidance of $285 million to $295 million, while net income fell 15% and the stock trades at a high P/E ratio of 92.63. Analysts maintain a consensus “Hold” rating with a $132.50 target price.

Royal Bank of Canada trimmed its position in Graham Corporation (NYSE:GHM - Free Report) by 12.8% in the first quarter, according to its most recent filing with the SEC. The institutional investor owned 214,119 shares of the industrial products company's stock after selling 31,506 shares during the period. Royal Bank of Canada owned about 1.83% of Graham worth $16,898,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds have also recently added to or reduced their stakes in GHM. American Capital Management Inc. lifted its position in shares of Graham by 10.1% during the 1st quarter. American Capital Management Inc. now owns 51,520 shares of the industrial products company's stock worth $4,066,000 after buying an additional 4,717 shares in the last quarter. Quantinno Capital Management LP grew its holdings in shares of Graham by 35.1% in the first quarter. Quantinno Capital Management LP now owns 6,160 shares of the industrial products company's stock valued at $486,000 after acquiring an additional 1,601 shares in the last quarter. Bank of Nova Scotia grew its holdings in shares of Graham by 29.1% in the first quarter. Bank of Nova Scotia now owns 4,878 shares of the industrial products company's stock valued at $385,000 after acquiring an additional 1,100 shares in the last quarter. Sei Investments Co. increased its position in shares of Graham by 62.4% during the first quarter. Sei Investments Co. now owns 63,553 shares of the industrial products company's stock valued at $5,016,000 after acquiring an additional 24,419 shares during the last quarter. Finally, Calamos Advisors LLC increased its position in shares of Graham by 4.1% during the first quarter. Calamos Advisors LLC now owns 24,660 shares of the industrial products company's stock valued at $1,946,000 after acquiring an additional 979 shares during the last quarter. Hedge funds and other institutional investors own 69.46% of the company's stock.

Key Graham News

Here are the key news stories impacting Graham this week:

• Positive Sentiment: Quarterly earnings were reported at $0.49 per share, exceeding the consensus estimate of $0.27, while revenue rose 28.6% year over year to $71.34 million, above expectations of $65.60 million. Graham quarterly earnings report
• Positive Sentiment: Orders reached $95.9 million, producing a 1.3x book-to-bill ratio, and backlog climbed to a record $557.2 million. The figures improve visibility into future revenue and suggest continued demand for Graham’s industrial and defense products. Why Did Graham Post Strong Quarterly Growth?
• Positive Sentiment: Graham was awarded more than $43 million in defense contracts for mission-critical submarine and turbomachinery products, adding to the company’s long-term order pipeline. Graham defense contract announcement
• Neutral Sentiment: Management reaffirmed fiscal 2027 revenue guidance of $285 million to $295 million, broadly in line with the approximately $289 million analyst consensus. The lack of an upward revision may temper enthusiasm despite the quarterly beat.
• Neutral Sentiment: The company ended the quarter with $27 million in cash and no outstanding debt after raising $50 million through a stock issuance and repaying $13 million of debt. The stronger balance sheet supports operations but the share issuance may dilute existing shareholders.
• Negative Sentiment: Net income declined 15% to $3.9 million despite higher sales, indicating that profit conversion remains a concern. With the stock trading at a high earnings multiple, investors may remain sensitive to margin pressure and execution risks.

Graham Price Performance

Shares of NYSE:GHM opened at $104.67 on Friday. The company has a 50 day moving average of $107.15 and a 200 day moving average of $93.45. The stock has a market cap of $1.23 billion, a P/E ratio of 92.63 and a beta of 1.04. Graham Corporation has a 12 month low of $46.58 and a 12 month high of $125.82. The company has a current ratio of 1.00, a quick ratio of 0.68 and a debt-to-equity ratio of 0.09.

Graham (NYSE:GHM - Get Free Report) last posted its earnings results on Thursday, August 6th. The industrial products company reported $0.49 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.27 by $0.22. Graham had a net margin of 5.10% and a return on equity of 11.94%. The business had revenue of $71.34 million for the quarter, compared to analysts' expectations of $65.60 million. During the same period in the prior year, the company posted $0.45 EPS. The business's revenue for the quarter was up 28.6% compared to the same quarter last year. As a group, sell-side analysts forecast that Graham Corporation will post 1.89 EPS for the current fiscal year.

Analyst Upgrades and Downgrades

Several research analysts have weighed in on GHM shares. Zacks Research cut Graham from a "strong-buy" rating to a "hold" rating in a research report on Wednesday, June 10th. Oppenheimer lifted their target price on Graham to $130.00 and gave the stock an "outperform" rating in a research note on Thursday, June 25th. Weiss Ratings downgraded shares of Graham from a "hold (c+)" rating to a "hold (c)" rating in a report on Wednesday, July 29th. Wall Street Zen lowered shares of Graham from a "hold" rating to a "sell" rating in a research report on Saturday, June 13th. Finally, Northland Securities boosted their target price on shares of Graham from $111.00 to $135.00 and gave the company an "outperform" rating in a research note on Tuesday, June 23rd. Two investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of "Hold" and a consensus target price of $132.50.

About Graham

Graham Corporation NYSE: GHM is a U.S.-based industrial engineering company that designs, manufactures and services vacuum and heat transfer equipment. Its core offerings include liquid ring vacuum pumps, surface condensers, heat exchangers and custom-engineered vacuum systems. These products play a critical role in energy-intensive industries, where reliable removal of non-condensable gases and efficient heat exchange are vital to process performance.

The company's technologies find application across a range of end markets, including power generation, petrochemical, oil and gas, LNG, and semiconductor manufacturing.

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